The American publicly traded television broadcasting company based in Atlanta, Georgia, Gray Television, Inc. (NYSE: GTN) seems to be gearing up for a surge as per its latest charts.
Bullish Indications
#1 Channel Breakout: The daily chart shows that the stock has currently broken out of an uptrend channel. This uptrend channel is marked in pink color lines. A breakout from an uptrend channel with high volume is a possible bullish indication.
Daily Chart – GTN
#2 Trading above MAs: The price is currently above its short-term moving average of 50-day SMA as well as the longer-time moving average of 200-day SMA. This implies a possible bullish bias for the stock.
#3 MACD above Signal Line: The daily chart shows that the MACD line (blue color) is currently above the MACD signal line (orange color). This is a possible bullish setup.
#4 Bullish ADX and DI: The ADX line has started to move up from below –DI and +DI lines. The +DI line and the -DI lines are also currently above the –DI line. This indicates possible bullishness.
#5 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the daily chart. This indicates possible bullishness.
#6 Ascending Triangle Pattern: The weekly chart shows that the stock is currently forming an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern. This is marked on the daily chart in purple color lines. A breakout from this pattern typically indicates bullishness. The base of the triangle generally acts as a good support level after the breakout. The stock is also trading above the 50-week and 200-week SMA, indicating that the bulls are currently in control.
Weekly Chart – GTN
#7 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the weekly chart as well. This indicates possible bullishness.
#8 MACD Above Signal Line: In the weekly chart as well, the MACD line (light blue color) is currently above the MACD signal line (orange color). This is typically considered a bullish signal.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for GTN is above the breakout level of the ascending triangle pattern. This translates to a price of around $23.20.
TP: Our target prices are $30 and $35 in the next 3-6 months.
SL: To limit risk, place a stop loss at $19.20. Note that this stop loss is on a closing basis.
Our target potential upside is nearly 29% to 51% in the next 3-6 months.
For a risk of $4.00, the target rewards are $6.80 and $11.80. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the ascending triangle pattern. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in its sector.
Happy Trading!
— Tara
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